Wine and cigars: Fights over direct shipment show who has the clout in Annapolis

Friday is a red letter day for Maryland residents who like their grapes crushed, fermented and bottled: For the first time in modern history, it is legal to have a bottle of wine, whether produced in Maryland or elsewhere, shipped directly to one's door.

The General Assembly granted this privilege only after years of tireless grass-roots campaigning by advocates in Annapolis and elsewhere. All of whom are no doubt thinking this single thought today: What idiots we are.

Why? Because cigar aficionados have made them look like they have all the political influence of belly button lint. When direct shipment of premium cigars was threatened by a new law restricting on-line sales of tobacco products — a measure that was actually sought by Comptroller Peter Franchot last year — the cigar lovers fought back far more successfully.

The result? Mr. Franchot announced on June 21 that he will "temporarily defer enforcement of the online sales of premium cigars."

So under that arrangement, anyone in Maryland can order a premium cigar on the Internet and have it shipped directly to his or her door. Maryland taxes may or may not be paid. Nor will there necessarily be any protections from the cigars ending up in the hands of a minor. It's not even clear how Mr. Franchot's staff will sort out "premium" cigars from the standard variety.

The contrast with that other closely-regulated vice — the consumption of alcohol — couldn't be greater. The direct wine shipment law is so narrowly crafted, (it costs wineries about $300 annually in licensing and bonding costs and prohibits retailers from shipping entirely) that only 26 of the nation's 6,500 or so wineries have so far signed up for the privilege. And that's for a product, as the comptroller's own study noted, for which taxes will be collected and minors won't have access.

Meanwhile, a reported 800 premium cigar customers complained about the ban on the direct shipment of tobacco products (other than cigarettes which are already banned), and Mr. Franchot is telling his agents to look the other way.

Here's a word of advice to Maryland wine retailers who continue to be banned from shipping their product to customers out-of-state: Get those same 800 people to lobby for you, too.

Of course, the reality is that this isn't about those cigar smokers at all. It speaks far more to the influence of the alcohol distributors in Annapolis who are loath to give up their stranglehold on the market under the state's three-tiered system of liquor regulation. Premium tobacco retailers just don't have that kind of clout — if they even cared about on-line competition.

There's no more rational basis for banning the shipment to consumers of premium cigars than there was to prohibit direct wine sales. But clearly what's needed for cigars are the same sorts of protections that were required of wine shippers to ensure taxes are paid and kids aren't getting these products by mail. It's just curious that Maryland's default position with cigars is to ship them first and ask questions later.

For wine lovers, the far better example to follow is New Hampshire where wineries pay no licensing fee at all. Why? Likely because the state earns so much from its 9 percent sales tax on alcohol, the same rate Maryland will charge the public as of Friday.

That's an approach Mr. Franchot may want to endorse on Friday when he officially becomes the first person in Maryland to order a bottle of wine through the direct shipment law, an event he is staging with great fanfare at Boordy Vineyards inBaltimore County.

Meanwhile, perhaps lawmakers will learn from their mistakes and bring parity to the tobacco and wine direct shipment laws. Maryland law ought to make the convenience — and protection — of consumers its top priority and not indulging a favored, and well-financed, special interest.

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